United Parcel Service on Tuesday said it had eliminated 34,000 jobs this year to cut costs, as the firm posted better profits than the Wall Street’s expectations.
Giving details about its turnaround efforts, UPS said that the job cuts were done in its permanent operational workforce, which includes drivers and package handler.
The 34,000 eliminated jobs marked a 70 per cent increase from its previous target. UPS had in April said it was planning to lay off 20,000 of its employees as part of its turnaround plan.
How is UPS cutting costs?
Apart from the UPS layoffs, the company has been looking at other ways to cut its costs as it significantly reduces the number of Amazon shipments it handles.
UPS closed daily operations at 93 leased and owned buildings during the first nine months of this year as part of its turnaround plan, beating its own expectations.
During its April announcement, the company had said it expected the closing of 73 leased and owned buildings by the end of June.
“This is exactly what UPS needed,” said Matt Maley, chief market strategist at Miller Tabak.
The parcel company further said it was looking for other locations to close operations to enable more labour-saving automated work to replace workers.
UPS also said it was seeking to shut its less-profitable business from its network, such as low-value e-commerce goods from Amazon.
UPS Q3 results
UPS earned $1.31 billion, or $1.55 per share, for the three months ended September 30. Compared to this, the Atlanta-based company earned $1.99 billion, or $1.80 per share, a year earlier. Removing one-time costs, earnings were $1.74 per share.
That easily topped the $1.31 per share that analyst polled by Zacks Investment Research were calling for, Reuters said in a report.
Revenue came in at $21.42 billion, surpassing Wall Street’s estimate of $20.84 billion.
The better-than-expected UPS Q3 results indicate that Chief Executive Officer Carol Tomé’s turnaround plans are working after the company struggled with sluggish demand, uncertainty triggered by Trump tariffs and high costs.
The parcel industry has faced significant challenges this year due to disruptions to international commerce under President Donald Trump’s trade policies.
UPS said on Tuesday it expects the Q4 revenue to come in at $24 billion, slightly ahead of expectations.
So far, the cost-reduction plan of UPS, including the layoffs, have generated savings of about $2.2 billion through the first nine months of this year, the company said.
It expects to achieve $3.5 billion in total year-over-year cost savings in 2025.
